Debt Relief



Help With Credit Cards

When to Use a Credit Card

The Best Credit Cards

How to Choose

Common Mistakes

Credit Card Services

Credit card services generally come at a price. Although it may seem like you're getting something for nothing, the reality is that credit companies, like all businesses, exist to make money. Whether it be through high interest rates, annual fees, or various other charges, they do make a huge profit (or at least did until recently with the credit crisis). Some of the credit card services you might see advertised include airline miles (for free), cash back, discount gasoline and groceries, or cash advances. We'll take them on one at a time.

Cash advances are one example of a credit card service that can really come back to bite you. Before you withdraw that money, stop and consider if you absolutely need it. If you do, then ask why you have to get the cash now, and don't repeat that mistake in the future. By forwarding you the money, the credit card company has just entered you into a contract that will make you even more debt ridden than you were before. Because of lax laws and weak legal enforcement, credit card companies are able to charge huge interest rates on these loans: ten percent, twenty percent, or even more.

Another service credit cards offer is the transfer of balance. This is where it can get dicey. Before transferring a balance, you must know what you're getting into. Is it going to max out your balance on the new card, causing problems before you even begin? What about the interest rates? Consider when will they kick in, how much will they be, and how much, if anything, you will be saving money in the long run. For instance, twenty percent of two thousand dollars is four hundred. If you find a card giving you sixteen percent, but have a new balance of five thousand dollars, you'll be paying eight hundred in interest. You've got a better rate, but your payments are now quite a bit higher (because of the extra debt).

photo of credit cards in wallet